How Much Does EU Citizenship Cost? the Maltese Citizenship-For-Sale Affair: a Breakthrough for Sincere Cooperation in Citizenship of the Union? Sergio Carrera

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How Much Does EU Citizenship Cost? the Maltese Citizenship-For-Sale Affair: a Breakthrough for Sincere Cooperation in Citizenship of the Union? Sergio Carrera How much does EU citizenship cost? The Maltese citizenship-for-sale affair: A breakthrough for sincere cooperation in citizenship of the union? Sergio Carrera No. 64/April 2014 Abstract How much does European citizenship cost in the EU? This was the question that has raised so much controversy over the Maltese citizenship-for-sale programme. The outright selling of Maltese nationality to rich foreigners led to unprecedented responses by the European Parliament and European Commission. This paper examines the affair and its relevance for current and future configurations of citizenship of the EU. It studies the extent to which member states are still free to lay down the grounds for the acquisition and loss of nationality without any EU supervision and accountability. It provides a comparative overview of member state schemes and the exact price for buying citizenship and a residency permit in the EU. It is argued that the EU’s intervention on the Maltese citizenship-for-sale affair constitutes a legal precedent for assessing the lawfulness of passport-for-sale or golden migration programmes in other EU member states. The affair has also revealed the increasing relevance of a set of European and international legal principles limiting member states’ discretion over citizenship matters and providing a supranational constellation of accountability venues scrutinising the impact of their decisions over citizenship of the Union. The Maltese citizenship-for-sale affair has placed at the forefront the EU general principle of sincere cooperation in nationality matters. Member states’ actions in the citizenship domain cannot negatively affect in substance the concept and freedoms of European citizenship. That notwithstanding, the EU institutions’ insistence on the need for Maltese nationality law to require a ‘genuine link’ in the form of an effective residence criteria for any rich applicants to benefit from the fast-track naturalisation poses a fundamental dilemma from the angle of Union citizenship: What is this genuine link really about? And what is precisely ‘habitual’, ‘effective’ or ‘functional’ residence? It is argued that by supporting the ‘real connections’ as the most relevant standard, the European institutions may paradoxically fuel nationalistic misuses by member states of the ‘genuine link’ as a way to justify restrictive integration policies on the acquisition of nationality. This paper was prepared in the context of the ILEC project (Involuntary Loss of European Citizenship: Exchanging Knowledge and Identifying Guidelines for Europe), which aims to establish a framework for debate on international norms on involuntary loss of nationality. For more information visit: www.ilecproject.eu ILEC is a research project co-funded by the European Commission’s DG Justice, Citizenship and Fundamental Rights. CEPS Papers in Liberty and Security in Europe offer the views and critical reflections of CEPS researchers and external collaborators on key policy discussions surrounding the construction of the EU’s Area of Freedom, Security and Justice. The series encompasses policy-oriented and interdisciplinary academic studies and commentary about the internal and external implications of Justice and Home Affairs policies inside Europe and elsewhere throughout the world. Unless otherwise indicated, the views expressed are attributable only to the author in a personal capacity and not to any institution with which he is associated. This publication may be reproduced or transmitted in any form for non-profit purposes only and on the condition that the source is fully acknowledged. ISBN 978-94-6138-396-9 Available for free downloading from the CEPS website (http://www.ceps.eu) ©CEPS, 2014 Contents 1. Introduction........................................................................................................................................... 1 2. Background to the controversy: EU passports for sale! .......................................................................... 3 3. Reactions from the European institutions: Citizenship must not be up for sale! ...................................... 6 4. Investor citizenship and residency programmes in the EU: A comparative outlook................................. 9 4.1 Investor citizenship-for-sale programmes ..................................................................................... 10 4.2 Investor residency programmes .................................................................................................... 13 4.3 How much does citizenship and security of residency cost in the EU? .......................................... 16 4.4 So why only Malta? ..................................................................................................................... 19 5. Legal grounds backing EU intervention: Post-national citizenship principles and accountability venues .................................................................................................................... 20 5.1 Supranational standards and judge-made principles ...................................................................... 20 5.2 The principle of sincere cooperation re-loaded ............................................................................. 22 5.3 Sincere cooperation, nationality and the genuine link: Living apart together? ............................... 24 6. Conclusions......................................................................................................................................... 30 References .................................................................................................................................................. 33 Annex 1. Individual Investor Programme of the Republic of Malta ............................................................. 35 Annex 2. Investor Citizenship Programmes in the EU ................................................................................. 36 Annex 3. Investor Residency Programmes in the EU ................................................................................... 43 How much does EU citizenship cost? The Maltese citizenship-for-sale affair: A breakthrough for sincere cooperation in citizenship of the union? Sergio Carrera* CEPS Paper in Liberty and Security in Europe No. 64 / April 2014 1. Introduction The Maltese citizenship-for-sale affair has attracted wide attention since its inception at the end of 2013. The announcement by Prime Minister Joseph Muscat’s government of an amendment to the Maltese Citizenship Act introducing an investor citizenship programme selling Maltese nationality to any foreigner making a donation to the State or investing a substantial amount of euros in the country without any other requirement led to controversy both in domestic and European circles. The case presented an evident European dimension. What Malta was actually planning to put on sale was not only its own nationality, but also the supranational status enshrined in citizenship of the Union. Any person holding the nationality of a member state is a European citizen and enjoys the rights attached to it, such as the freedom to move and reside within the territory of the Union. At the heart of the debates surrounding the adequacy of the Maltese initiative has been the extent to which the European institutions, and in particular the European Commission, could legally intervene and prevent the Maltese government from introducing the scheme. From an EU legal viewpoint the case was a difficult one to argue. Questions related to the acquisition and loss of nationality have remained engrained in the exclusive competence of member states since the kick-off of citizenship of the Union in 1993, with the entry into force of the Maastricht Treaty. One of the most sacred of cows in the division of competences between the member states and the EU is the entitlement to control citizenship laws. No one can become an EU citizen without first passing through the hands of a member state. Since the introduction of EU citizenship, a number of member states have been exceedingly anxious to keep the EU out of their citizenship laws and policies.1 Since then, citizenship has been something of a ‘hands-off’ area as regards EU law. The extent to which member states are fully autonomous in the regulation of nationality has, however, become increasingly contested. Nevertheless, something fundamental has changed over the last 20 years. The classic boundaries delimiting member states’ discretion over nationality laws have been reshaped as a consequence of the emergence of a set of international principles and legal and judicial accountability venues overseeing their domestic actions. The degree of exclusivity traditionally enjoyed by EU member states has been progressively re-modelled, sometimes in unexpected ways. Moreover, while formally keeping their autonomy in the regulation of nationality issues, the Court of Justice of the European Union in Luxembourg has on several occasions held * Dr. Sergio Carrera is Senior Research Fellow and Head of the Justice and Home Affairs Section at the Centre for European Policy Studies (CEPS) in Brussels. The author would like to first express his gratitude to Prof. Elspeth Guild for her substantial comments and suggestions on earlier drafts of this essay. He is also very grateful for the valuable comments received on a previous draft by Prof. René de Groot (University of Maastricht) and an anonymous external reviewer. He would like to thank Prof. Judit Tóth (University
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